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• . Average capital employed14,00,000. Net profit 2011 2,50,0002012 1,00,000 (loss) 2013 4,50,000 NRR10% Goodwill at 3 years' purchase ofsuper profit will be​

Answer»

Explanation:

Average profit = Total Trade profits/ NUMBER of

years profits

= 250000+ 450000 - 100000/5

= 700000-100000/5

= 600000/5

= RS. 1,20,000

NORMAL profit = AVG capital employed X Normal

Rate of return

= 14,00,000 X 10/100

= Rs. 1,40,000

Note : we are not calculated SUPER profit because the excess of normal profit over Avg profit

super profit = Avg profit - super profit

= 120000 - 140000

= - 20,000



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